"Indian River’s research confirms what they have been preaching for years: Compensation programs are effective only if they exist in an environment of clear and actionable objectives with real sales management. This book goes much further than just providing research results. It supplies a comprehensive process for avoiding the common pitfalls companies make when redesigning their compensation programs and walks the reader through effectively designing and implementing compensation programs that support company objectives."

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Is your salesforce pay plan the right one?

According to What’s Your Plan? Smart salesforce Compensation in Wholesale Distribution, there is absolutely no relationship between your sales incentive plan and your likely gain or loss in market share.

In fact, here’s what matters most:

Setting an objective

Getting management to use it in rating salesperson performance

Making sure your whole team buys in.

This book debunks the myths and shows you how to bring these three all-important factors into alignment. Get ready for a real “A-ha!” experience.

Take this little quiz:

To increase market share, a wholesale distribution firm should pay its outside salespeople:

Commission to keep them hungry

Salary so they think beyond the short term

Some combination of A and B

It doesn’t matter.

Our hunch is you didn’t pick D. However, according to the authors, there is absolutely no relationship between your sales incentive plan and your likely gain or loss in market share.

In fact, here’s what matters most:

Setting an objective

Getting management to use it in rating salesperson performance

Making sure your whole team buys in.

The authors surveyed hundreds of wholesale distribution executives and talked to dozens more in-depth by phone. Their main finding is that pay plans don’t or can’t operate effectively in a corporate/sales management vacuum. That may seem obvious, but the data here raise this question: If it’s so obvious, why are so many wholesaler-distributors operating otherwise?

By reading this book and thinking deeply about the real-life compensation case studies presented, you can determine whether your firm has the preconditions in place to verify that your salesforce pay plan is the right one, or to adjust it as necessary so it produces the results you’re seeking.

About the Authors

Mike Marks

Mike co-founded Indian River Consulting Group in April 1987 after a 20-year career in distribution management. He has written extensively, is frequently quoted on many industry issues, and is a research Fellow of the NAW Institute for Distribution Excellence. He is recognized for his expertise in channel strategies, supply chain management, and the practical application of technology.

Mike began his career at Indian River Consulting Group (IRCG) in 1997 and has worked with hundreds of distributors and manufacturers of all sizes and within many lines of trade. He has managed a broad array of IRCG projects. His main focus areas include: compensation design, strategy facilitation, market research, and data modeling and analysis. Mike writes extensively on distributor and marketing channel topics and is frequently quoted on contemporary issues.